Vive le 35-hour week?

The French experience of the 35-hour week has not been the calamity so
widely predicted, writes Stephen Overell

When the National Union of Teachers called for a 35-hour working week
earlier this year, the Education Secretary Estelle Morris dismissed the idea as
"potty" and incompatible with being a professional.

It has always been the fate of the 35-hour week to be called mad, and it is
evidently no less mad now that the French experiment of le trente-cinq is under
way, not so very far from the apparently sane, orthodox shores of Blighty.

The law reducing the "statutory length of actual work" to 35 hours
a week averaged over a year has now been in force since January 2000 (January
2002 for organisations with fewer than 20 staff). French employers call it an
"absurdity". President Jacques Chirac says it is "ideologically
obsolete". Economists fall over themselves to denounce it.

Yet it seems that French workers, with their Wednesday afternoons off and
short Fridays, are not quite so convinced of its lunacy. Surveys have found
that four-fifths believe their lives have improved because of it.

The new centre-right administration may seek to water it down, but it is
hard to envisage a return to the 39-hour week becoming a popular slogan. For
some workaholic Anglo-Saxons, meanwhile, le trente-cinq is both a compelling and
appalling spectacle in equal measure.

The 35-hour week was the flagship policy of the former left-wing coalition
led by Lionel Jospin. At its heart lay a beguilingly simple idea: more workers
doing fewer hours. If existing workers cut back on their hours, the unemployed
could take up the slack – a redistribution of working time that would in the
process increase flexibility.

But as economists pointed out at the time of its introduction, the idea that
a fixed quantity of work exists to be parcelled out is a fallacy; there is no
such thing as a limit on the amount of work that needs doing. Moreover,
aggressive state regulation is not the normal way to go about increasing
flexibility.

Confusing it may be, but what has been the result? On job creation, the
record is mixed. In 1997, unemployment peaked at 12.4 per cent and now sits at
about 8.8 per cent. Yet Martine Aubry, the former employment minister, admitted
only a fifth of new jobs were directly spawned by the 35-hour week. Most were
the result of robust growth.1

On flexibility, ironically, the impact seems to have been more apparent. As
part of the law, employers and unions were encouraged to negotiate how to bring
in the law at plant level by collective bargaining. This has entailed an
expansion of influence, both direct and indirect, for trade unions, which have
always suffered from low membership – about 10 per cent. But in exchange
employers have wasted no time in stripping away decades of accumulated
restrictive practices.

At Samsonite, the luggage manufacturer, workers agreed to 42 hours a week
during summer, when the demand for baggage is high, in exchange for 32 hours a
week in winter.

And Renault and Peugeot have learned to love the 35-hour week because it
meant they could ‘idle’ workers in slack months.

Yet among many small businesses, especially in sectors such as restaurants
and trucking, the law has succeeded only in driving up costs while dazzling
employers with complicated formulas for calculating overtime. Meanwhile, some
occupations, such as civil servants, senior executives, doctors, lawyers and
soldiers, are deliberately excluded and are suffering the consequences.

Needless to say, as a result of a shorter working week, wasting time at work
has become a crime of heinous proportions. Productivity – always at the heart
of all discussions about curtailing working time – has risen smartly since
2000, with France sitting as the fourth most productive country in the world.
The insurance union has complained its members are becoming stressed, while
others have noted unforeseen problems.

"The risk of the 35-hour week is that it can affect the workers’
motivation," argues Valerie Fiton, HR manager with Advanta, an Agen-based
company manufacturing grains and cereals.

She adds: "There are strict controls governing the hours worked.
Sometimes employees might not get their work finished. It’s frustrating for
them not to see a vision of the work as a whole. But we’ve gained in
productivity and efficiency."2

The number of hours the average person now works has had a noticeable effect
on the rigidities of French social life. Prior to the law, just 1.6 per cent of
the workforce worked a 35-hour week. By June 2001, 62 per cent were working 35
hours – a figure sure to have risen since.3 Weekends now start on Thursdays and
end on Tuesdays. Middle-ranking executives find they have an extra two weeks’
holiday a year – on top of the six they already had, and the leisure and DIY
sectors are booming.

Questions remain, however, about how France can afford its working week.
Companies that reduced working time through collective agreements in advance of
the statutory application of the law, and which took on new recruits as a
result, were entitled to state aid. Employer social security contributions were
reduced in proportion to the workers covered by the reduction (although state
aid was only temporary).

In addition, for recruiting 9 per cent more staff, employers could get an
extra government grant. The National Economic Planning Agency has estimated the
cost of subsidising new jobs is running at £4,600 per job and has left the
Government with a £1.5bn bill.

With the new Government committed to tax breaks, the question is whether
productivity growth will be enough to offset the costs.

The main employers’ organisations, MEDEF and the CNPF, remain deeply opposed
to the 35-hour week in principle, though in practice they are advising members
on tactics.

Few would call it a runaway success. Yet even US think tanks have been
startled by just how great a margin the French experiment has not been a
calamity. "The French Government has succeeded in applying a complex,
socially contentious and economically ill-advised policy reform with unexpected
élan," as one analyst put it.4

Could it ever happen here? The distance between France and Britain seems far
more real than physical space would indicate.

References

1 Reduction of working time: lessons from its analysis, Commissariat general
du plan, 2001

2 Interview on Newsnight, 29.5.01

3 Commissariat general du plan, as above

4 France’s 35-hour work week: Flexibility Through Regulation, by Gunnar
Trumbull, Center on the United States and France, 2001.

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